South Dakota Government Blog by Bob Mercer

Monthly Archives: August 2015

The numbers of young people assigned to the state’s STAR Academy for juveniles at Custer have gone down in recent years. So have the complaints. It was 15 years ago the Legislature authorized a juvenile corrections monitor after the problems at Plankinton (since closed) and Custer. The latest report from the current JCM shows 40 notes were left by youths in the campus lock-boxes at Custer for the six-month period of January through June 2015. Four dealt with peer problems, 28 with staff behavior and eight miscellaneous. The complaints were resolved through discussions.

Here are youth contacts for the past six reporting periods, according to the JCM report:

July-December 2012 — 125;

January-June 2013 — 124;

July-December 2013 — 97;

January-June 2014 — 64;

July-December 2014 — 48; and

January-June 2015–40.

The report also contains a six-year summary comparing the types of contacts from 2010 through 2015. Because 2015 is a half-year, we can look through 2014. Program complaints fell from 45 to 12. Staff complaints climbed from 94 to 115 in 2013 and dropped to 55. Peer complaints bounced up and down, from 20 to 32 in 2013 and then 24 in 2014. Miscellaneous went from two to 48 in 2012 to 21 in 2014.

The current JCM, Bruce Rook, delivered the semi-annual report to the Legislature’s Government Operations and Audit Committee last week.

The South Dakota Science and Technology Authority that oversees the Sanford deep underground laboratory at the old Homestake mine in Lead has a new member.

Gov. Dennis Daugaard appointed Robert Wilson, a faculty member at Colorado State University. He succeeds attorney Tom Adam of Pierre as a member of the authority’s board of directors.

Wilson earned his Ph.D. from Purdue University in 1983 and joined the CSU faculty in 1992. His career in physics led him to major participation in the Long Baseline Neutrino Experiment conducted between Fermi laboratory near Chicago and the Lead lab. He was named a co-leader for the project in 2012. His explanation of what he does was published in a Colorado newspaper in July.

The authority essentially serves as the landlord for the mine site at Lead. The authority’s executive director is Mike Headley.

The directors tend to be members of South Dakota’s business and legal community. Wilson is the latest university researcher to be chosen for the board. In 2009 Gov. Mike Rounds appointed Ani Aprahamian from the University of Notre Dame University, where she is a professor of experimental nuclear physics.

The South Dakota Supreme Court issued a decision this week that denied John Reints’ attempt to stop paying property taxes on his home in Pennington County under the state’s homestead exemption protection. Reints applied under the correct state law in January 2014. He turned 70 in March 2014. The county treasurer rejected his application because he wasn’t 70 at the time he submitted it. The treasurer made the right decision on that fact, according to the five justices.

But the justices in their decision also took apart the state Department of Revenue’s argument and the county’s argument, showing at one point that the county’s interpretation and the department’s interpretation counter each other. The concluding paragraph of the court’s opinion carries this summary of the situation:

The prohibition offered by SDCL chapter 43-31 is intended to
provide tax relief for low-income applicants who have reached the age of 70 by
deferring property taxes on their actual dwellings. The County’s view that a
prohibition shields only a specific assessment year of tax liability from collection is
inconsistent with this intent and contrary to the plain meaning of SDCL chapter 43-
31. Once a prohibition is granted, a county is restrained from collecting any real
property taxes on the applicant’s single-family dwelling, regardless of when those
taxes were assessed. Nevertheless, an applicant cannot establish a base year until
he actually reaches the age of 70. Because Reints was only 69 years old when he
submitted his application, he had not established a base year as required by SDCL
43-31-32. Therefore, while the County’s reason for denying Reints’s application—
and the Department’s basis for upholding that decision—was faulty, the result was
correct. Consequently, we affirm.

His latest post on South Dakota Democrats at the Northern Valley Beacon blog is yet another reason to keep track of the writings by David Newquist of Aberdeen. Another example is a recent post regarding the education climate in South Dakota. His social commentary is well-written and through its use of anecdotes rings true. You don’t find his level of intellect and his command of language at most South Dakota blogs or in most mainstream publications or broadcasts in South Dakota.

Director Sandy Klatt of Brandon school board led the South Dakota High School Activities Association board into a discussion today about the decision last spring by the general membership to approve putting $155,000 into the association’s foundation. Klatt said school districts subsequently received bills for catastrophic insurance from the association. Her question was, in a nutshell, whether this is fair to taxpayers who fund public schools. The upshot was an eventual consensus among board members that the board should change its process so that significant finance decisions receive more than a single, brief discussion. There was a mixture of opinions today from various directors about whether school district officials understood the $155,000 shift into the foundation. Director Linda Whitney of Sanborn Central turned the discussion when she explained it is a matter of perception. Chairman Jason Uttermark of Aberdeen Central said there are things the board can do differently in the future to allow more time for schools’ staffs and school boards to consider proposals from the association’s board. New director Dave Planteen of Langford school board said he would appreciate that school boards receive time to analyze such issues. Executive director Wayne Carney remains a firm advocate for growing the foundation. Uttermark and director Steve Morford of Spearfish said they support the foundation but the funding should come from private donations. Carney asked the eight directors to submit to him their ideas on what the foundation could provide.

The South Dakota High School Activities Association board of directors gathers today in Pierre for a strategic planning session. There are some important things on the agenda including a look at the financial results from state-tournament basketball play at Sanford Premier Center and a review of state-tournament ticket prices. Assuming there will be a live audio stream, the link would be here and the meeting starts at 11 a.m. CT. The board also holds a regular business meeting Thursday. Those agenda materials are here.

This is a sign of the times, specifically digital. The Legislative Research Council’s office complex on the Capitol’s third floor currently has a library space that includes a conference table and three stacks of law books, reports and other materials. That area will receive a new purpose this fall when the space is converted to offices for LRC fiscal staff. The change will put the fiscal staff directly adjacent to the offices of the chairmen for the Legislature’s Joint Committee on Appropriations and a few steps from the two conference rooms that serve as the meeting places for the committee. The hallway and sitting area between the offices and the conference rooms won’t be closed as some had contemplated. Jason Hancock, the LRC’s director, briefed the Legislature’s Executive Board on the reconfiguration plan Monday.

Hancock said the space for the library area is underutilized. He said the books and other printed materials once were “the critical resource” for legislative operations and research but “not all of those shelves and files contain things we use on an every-day basis in the Internet age.” He said the remodeling will proceed in mid-September with a few people moving up to the Capitol’s fourth floor for four to six weeks. He said legislators were surveyed whether they wanted to put a conference room in the hallway space by the arching window, The results showed a plurality preferred no change there. “We’re not proposing to do anything different with that space at this time,” he said.

In one semi-related change, the two conference rooms used for appropriations meetings (and for Democratic legislators’ caucuses) will be permanently separated by a new wall with a door. Currently there is a folding divider that serves as a barrier. The audio and visual presentations in the main conference room will be made available in the smaller conference room under the new arrangement. Several times Rep. Fred Romkema, R-Spearfish, questioned the wisdom of a new permanent wall but none of the other Executive Board members joined the point. There would be less seating with direct access to the main conference room as a result of the change.

Among its planning meeting and regular business meeting later this week, the South Dakota High School Activities Association board of directors also holds a special meeting at 11 a.m. CT on Thursday, Aug. 27, to accept nominations for a newly created seat on the board. The additional seat won approval from the high school membership earlier this year and is designed specifically to guarantee that the largest high schools — namely Rapid City and Sioux Falls — get their own director. The additional seat increases the total number of directors to nine. The statewide membership will select the new Division I representatives in a special mail-in election, with ballots due Oct. 9, for a five-year term. Future terms will be decided by elections held among the high schools.

The current directors are chair Jason Uttermark of Aberdeen Central, vice chair Steve Morford of Spearfish High School, Linda Whitney of Sanborn Central High School, David Planteen of the Langford school board, Sandy Klatt of the Brandon Valley school board, Bud Postma of Madison High School, Moe Ruesink of Sioux Valley High School and Roger Bordeaux of Tiospa Zina High School as at-large representative for Native Americans.

The governor’s Council of Economic Advisors meets next week in Lead. (The agenda is at CEA Agenda 8_27_15 and there’s some meat on the bones.) Gov. Dennis Daugaard recently reappointed the following members:

Once upon a time the Legislature created a special property-tax levy for school districts known as the capital outlay fund. It began for “the acquisition or lease of or additions to real property, plant, or equipment.” It gradually expanded to where it now occupies 474 words of space (but who’s counting) in South Dakota’s legal code. Basically it is a levy for a school district to use in addition to its general-education levy. But it applies on a straight basis regardless of property type, unlike the three separate levy amounts for general education on agricultural property, owner-occupied housing and other property that includes businesses, second homes and assorted other uses.

The use of capital outlay expanded because the Legislature doesn’t have to match it, whereas the state-aid formula involving the general-education levy does. State aid is based on a per-pupil amount set each year by the Legislature; what local property can’t provide for that per-pupil amount through the general-education levy, the Legislature supplements to reach the per-pupil amount. So the amount of state aid varies widely among school districts. Capital outlay is controlled locally by each school board and decides upon its uses. The Legislature has allowed broader and broader uses of capital outlay in recent years as the Legislature’s ability to provide sufficient state aid has become more strained.

In 2009, led by then-Sen. Russ Olson, R-Wentworth, the Legislature broadly expanded capital outlay’s uses to include routine expenses such as “the purchase of property insurance and casualty insurance, for payments for energy costs and the cost of utilities, and for motor fuel or for any portion of a contract providing transportation to students or for any mileage reimbursements.” This provision was supposed to expire June 30, 2012. But Olson came back with a renewer in 2011 that extended the expiration to 2014. And then in 2013, another renewer came, this time from Sen. Bill Van Gerpen, R-Tyndall; his measure took the expiration all the way out to June 30, 2018. So a three-year bandage suddenly became a 10-year fixture.

A year ago, Gov. Dennis Daugaard attempted to find a corrective, but his panel didn’t locate the sweet spot. Likewise for the Legislature’s agriculture assessment oversight task force. Capital outlay had the attention of the governor’s current Blue Ribbon task force on K-12 education at its meeting Wednesday. Tami Darnall, the finance director for the state Department of Education, presented data on the use of the 2009 flexibility provisions. She said 45 school districts have used capital outlay flexibility all five years while 29 haven’t used it at all; the remainder of the 151 districts used it at some point in the past five years. Her data showed many things, including information about districts that have opted out — that is, raised their general-education levy higher than the statewide standard set by the Legislature, and therefore putting more tax responsibility on their local property owners. Darnall’s data showed a cluster of districts that have used capital outlay flexibility all five years and have been in opt-out for all five years. Those “5 and 5” districts are Woonsocket, White Lake, Wessington Springs, Tripp-Delmont, Stickney, Scotland, Rutland, Arlington, Bison, Bon Homme, Bowdle, Dakota Valley, DeSmet, Grant-Deuel, Herreid, Irene-Wakonda, Lake Preston, McCook Central and Oldham-Ramona.

Task force members didn’t make any judgements, at least not publicly, yesterday about the capital outlay. The message from the data seemed to be that the capital outlay flexibility has become very important to the financial plans of many school districts and especially to those “5 and 5” districts that are taxing their property owners at additional levels through opt-outs. Making assumptions at the broad level would be difficult, said one of the task force co-chairs, Sen. Deb Soholt, R-Sioux Falls. “We wouldn’t even begin to understand all the nuances that went into that decision,” Soholt said. “We would really have to understand that at the very local level.” The governor’s chief of staff, Tony Venhuizen, said the importance of the information is to look ahead regarding what happens with the flexibility. Another member, Rep. Justin Cronin, R-Gettysburg, noted the 2018 expiration for the additional uses of capital outlay. As Cronin put it, the flexibility could be gone shortly.

What the task force might recommend regarding capital outlay isn’t clear. The panel meets again Sept. 9 and Oct. 1 to set goals and begin making recommendations. The scope is much, much broader than capital outlay. But the future of capital outlay will be an important piece of whatever the task force recommends to the governor and, in turn, whatever he recommends to the Legislature for consideration in the 2016 session.